Suppliers to Clive Peeters are sweating today over what could be the outcome for the retailer after trading in their stock was suspended earlier this week due to accounting discrepancies. Some suppliers are tipping that administrators could be appointed by as early as this weekend.
Company insiders have told ChannelNews that over $7M in salaries and allowances was not allocated properly and as a result Clive Peeters informed the Australian Securities Exchange (ASX) on Monday, that based on limited investigations, it was likely to increase its operating loss for the financial year ending June 30 to between $11 million and $12 million on a pre tax basis, compared to a forecast operating loss of $4.5 million to $5 million on a pre tax basis announced on July 1.
If administrators are appointed, the company could continue trading while it’s affairs are sorted out by administrators said one supplier.
Another major supplier said “Most suppliers have been paid however there is concern among suppliers as to the reaction of Clive Peeters bankers and what they will do. Serious questions have to be raised as to the state of Clive Peeters bookkeeping. What other problems are there and how did they manage to misallocate several million dollars in salaries. These are serious questions that the market and suppliers need answers to”.
A major insurance company who provides credit insurance to vendors has said that they were “seriously concerned”.
Among the major creditors are LG who are believed to be exposed for over $90 million dollars.
The retailer, which sells whitegoods and consumer electronic goods, notified the market that the company had become aware of accounting discrepancies on Friday July 31.
Clive Peeters shares were suspended from trading before the market opened on August 4. Since the announcement Clive Peeters shares have fallen over 35%.